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In recent months, the price of fertilizers has been going through a period of volatility, however, at high levels. This is what the RaboResearch Food and Agribusiness Q3 quarterly report from September 2021 points out, highlighting that the average price of urea reached USD 471/tonne in Aug./21, 68% higher compared to 12 months ago.
“Making the same analogy, in the last 12 months, MAP and KCl appreciated by 116% and 188%, respectively. Among other reasons, the increase in demand due to high commodity prices and supply uncertainties were essential for the increase in prices. Since 2020, high commodity prices have contributed to the demand for fertilizers”, explain the analysts.
According to them, the recent increase in fertilizer prices has slightly reduced the purchasing power of producers and may make new sales difficult, but nothing that affects the market considerably: “In parallel with the heated demand, uncertainties in global supply have been affecting fertilizer prices, especially for phosphate and potassium fertilizers”.
“In the phosphate market, in addition to the rearrangement between suppliers and buyers (after the US imposed tariff barriers on Moroccan and Russian companies), in China, the government's attempt to guarantee domestic supply and the return of environmental inspections could limit Chinese exports. in 2H 2021”, they highlight.
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As for potash, says Rabobank, political tensions between the European Union/United States and Belarus should drive prices in the future: “Although we do not believe in new sanctions, the market should still focus on the issue in the coming months. Brazilian fertilizer imports have been surprising in 2021, indicating the good moment in demand. Between January and August 2021, 24.5 million tons were imported, 17% higher than the same period in 2020”.
In this context, Rabobank projects Brazilian fertilizer demand at 44 million tons for 2021, an increase of 8.4% compared to 2020. The volume could be even greater, but logistical problems (global sea freight and internal circulation of trucks ) still generate uncertainty regarding product delivery, especially for the last quarter of 2021.
As “Points of Attention”, the financial institution specialized in agribusiness highlights:
- The global sea freight market is going through a challenging time, resulting in high prices and delays. The problem is more worrying for containerized freight, a fact that can bring
reflections on the availability of pesticides (such as glyphosate and desiccants) from the last quarter of 2021; - Rabobank expects fertilizer prices to remain firm, at least until the end of 2021, supported by strong demand and high commodity prices.
By: Leonardo Gottems | agrolink
